Government propose to extend First Great Western rail franchise for three to four years

Published: 10th October 2014

But did they have a real choice?

The Department for Transport (DfT) has announced that the First Great Western rail franchise has been extended to run until March 2019, a further 40 months from the already extended expiry date.

The DfT has announced their intention to what they call make a direct award in respect of their First Great Western (FGW) which is linked to the massive upgrade projects on the Great Western main line. This includes electrification and a brand new fleet of trains and the intention is clearly that the incumbent operator, FGW, should continue to operate the trains while the engineering works and train introduction programme has been completed.

It is well known amongst railway staff that when a project this large is underway, there will be disruption, most of it planned to minimise passenger inconvenience, but some unplanned disruption will happen on a project this size.

The risks are minimised if the train operator remains the same throughout the work as relationships and understanding is maximised. It is also known that when franchises change, staff are more likely to be concerned about what changes may be introduced and effects on their jobs.

So the award is aimed at maintaining stability of services while the upgrades are underway and perhaps they are hedging their bets as they will include a further one year extension until 2020. This could well be because if the upgrade slips by a year, they will not want a new franchisee starting before the work is complete.

They said:

Commenting, Tim O’Toole, FirstGroup’s Chief Executive, said:

“We welcome the publication of the latest DfT franchising timetable which continues to demonstrate clarity and momentum in the re-franchising programme. A period of detailed negotiation will follow but we are very pleased that, after a consultation process in which the DfT sought the views of stakeholders and user groups across the line of route, the DfT intend to negotiate a direct award of at least three-and-a-half years with us. This will offer good value for money and better services for First Great Western passengers and in particular, will provide stability and allow the planned major projects and new trains to be delivered.”

But how much room for negotiation did the DfT have?

FGW are unlike most other franchises as they own around 15b of their fleet of High Speed Trains. And had they been ousted as franchisees then this could have caused serious disruption to services. So FGW is in a strong negotiating position until the new Hitachi trains are introduced as there is a general shortage of 125mph trains in the UK given the expansion of services over the last decade or so.

Had FGW not been awarded the extension, it would have been a possibility that they could have taken their trains away from the Great Western main line route and operated them elsewhere under an open access agreement such as First Hull Trains services operate for example.

Saved one, lost one.

Commenting on losuing the Scoitrail franchise, Saying he was disappointed not to win the new contract, FirstGroup CEO Tim O'Toole said it 'does not alter the Group's stated medium-term targets'. FirstGroup is 'actively participating in franchise competitions with the objective of achieving earnings on a par with the last round of franchising, with an acceptable level of risk.

We are in negotiations with the Department for Transport to operate the First TransPennine Express franchise until February 2016, and continue discussions with the DfT in respect of a potential longer direct award to operate First Great Western, our largest franchise, over the period when a substantial programme of infrastructure upgrades and introduction of new trains will take place on the network.'

An apology from Network Rail concerning First Great Western disruption following signalling failures

FGW has welcomed an apology from Network Rail (NR) after signalling problems carried on into a third day disrupting services to and from Paddington. NR first reported problems with signalling and safety equipment in the Slough area from first thing on 6 October which blocked all lines and after implementing manual signalling meant only 25% of FGW trains could operate.

Problems remained for most of the week again preventing the full FGW timetable to be operated and NR has said it is investigating exactly what caused the problem to prevent repeat issues.

A Network Rail spokesperson, said: “We are sorry for the problems that have affected train services on the Great Western Main Line this week. Performance has been well below the standards passengers deserve and expect.

“We are acutely aware of the frustration and inconvenience felt by passengers when things go wrong. We are working constantly across the rail network to improve the reliability of train services, investing billions over the next five years across the West's rail network to improve signalling, replace old equipment and bring in new modern technology and new trains to provide more reliable train services.

“This week we have not been able to provide the reliability passengers expect for which we apologise. We are wholly focused on delivering a new, modern, reliable rail network for London and the West."

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